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Climate change issues in Oil & Gas Sector

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The Oil & Gas Sector has a variety of impacts on the environment. These impacts depends upon the stage of the process, the size and complexity of the project, the nature and sensitivity of the surrounding environment and the effectiveness of planning, pollution prevention, mitigation and control techniques.

Among all the different environmental impacts, the major focus lies on Atmospheric Impact caused by Oil & Gas Industry.

One of the major sources of Atmospheric Impact caused by Oil and Gas Industry is the flaring and venting of gases. So the principle target for emission reduction is in this domain.

Various technological initiative have been introduced to reduce emissions as a result of combustion process related to power production. More efficient gas turbines have been developed together with improved turbine maintenance regimes. Efficiency improvements may also result from gas turbine optimization considerations. Other technologies to improve fuel efficiency include: steam injection, combined cycle power generation, pump and compressor optimization, waste heat recovery and the application of energy conservation principles.

Improvements in the technologies have resulted in reduced emission from the different sources. The reduction of GHG emissions directly leads to reduction of global warming. These process improvement/energy efficiency measures causing emission reduction can be directly accounted for and thus can be considered as CDM projects.

Recovery and utilization of vapors, previously being vented out from oil storage tanks, using ejector system.

4. Carbon Capture & Storage (CCS)

Capture of CO2 from large stationary sources, transportation of the gas to an appropriate injection site where it is pumped and stored into underground geological formations such as natural gas and oil fields.

Storage may also be combined with Enhanced Oil Recovery (EOR) or Enhanced Gas Recovery (EGR)

This also results in energy consumption reduction of oil and gas recovery from the wells.

Steam optimization by installation of Dry-ejector system instead of steam-jet ejector in VDU

In Dry-ejector system vacuum gas oil is used as motive liquid and circulated in the system. This reduces generation of LP steam which is required as motive fluid in conventional steam-jet ejector. An unique technology.

A much lower cooling water temperature can be achieved through ‘mist cooling tower’. This improves heat recovery and reduces cooling water requirement hence lower pumping energy etc. Not a common practice in large-scale hydrocarbon industries.

Heat integration through the application of state-of-the-art pinch technology

Energy efficiency improvement through optimization of heat exchanger network in CDU/VDU/pre-heat train of distillation units etc. Optimization of HEN is performed using Pinch Analysis.

carbon transactions are purchase contracts whereby one party pays another party in exchange for a given quantity of GHG emission reductions, either in the form of allowances or “credits” that the buyer can use to meet its compliance objectives vis-à-vis greenhouse gas mitigation.

Payment for emission reductions can be made using one or more of the following forms: cash, equity, debt, or in-kind contributions such as providing technologies to abate GHG emissions.

Climate change and global warming: major threat to the Oil & Gas industries.

The Oil & Gas sector will be a significant part of an evolving solution to the CO2 challenge and certainly drive the ushering of a cleaner hydro carbon age in future.

Companies have already started pursuing strategies to position themselves in the cleaner, more sustainable and low carbon growth trajectory by conscious reorganization of their product portfolio and restructuring of their multi-location operations.

Big Oil Companies like British Petroleum is planning to invest USD 8 billion in low carbon power and alternative energy business over the next decade and aims at USD 1 billion of operating profit by 2015 from this business only.

Adoption of the right strategy for mitigating long term climate change risks can provide distinct competitive advantage.

Companies seeking to develop their strategies should first analyze their ‘value-at-stake’ or ‘value-at-risk’ under a variety of scenarios from current and emerging policies to reduce carbon emissions.

-Examples of productivity/efficiency ratios include resource productivity (e.g., sales per GHG) and process eco-efficiency (e.g., production volume per amount of GHG).

INTENSITY RATIOS (normalized” environmental impact data):

-Express GHG impact per unit of physical activity or unit of economic output.

-A physical intensity ratio is suitable when aggregating or comparing across businesses that have similar products. An economic intensity ratio is suitable when aggregating or comparing across businesses that produce different products. A declining intensity ratio reflects a positive performance improvement.